Russian state gas giant "Gazprom" reported its first annual net loss in more than 20 years in 2023 due to declining supplies to Europe and lower prices for the blue fuel, BNR reported.
Gazprom Group, which also includes oil and energy businesses, posted a loss of 629 billion rubles ($6.84 billion) last year, compared with a net profit of 1.23 trillion. rubles (about $13.3755 billion) in 2022, according to an earnings report published on Thursday and cited by Bloomberg and Reuters.
The results underscore the dramatic decline of Gazprom, which after the collapse of the Soviet Union became one of Russia's most powerful companies, often used as leverage to resolve disputes with its neighbors such as Ukraine and Moldova, Reuters noted. .
Analysts had expected net income of 447 billion rubles, according to Russia's Interfax news agency.
This is the first annual loss of "Gazprom" since the late 1990s (since 1999, according to Bloomberg) -- shortly before Alexei Miller, an ally of President Vladimir Putin, took over the company in 2001.
Russia's gas exports to Europe, once its main export market, have fallen sharply due to the political fallout from the conflict in Ukraine, with Gazprom, which has a monopoly on gas pipelines abroad, the most visible victim of Western sanctions . "Gazprom" also engaged in an extensive program to deliver natural gas to local households.
The net loss follows limited gas flows to Europe, which has historically been Gazprom's biggest market, since the start of a Russian invasion of Ukraine and subsequent Western sanctions. Meanwhile, falling gas prices amid mild winter weather, weak demand and solidly filled gas storage facilities contributed to Gazprom's loss.
Gas revenues decreased by as much as 40% to 4.88 trillion. steers, the energy giant's report also points out. While "Gazprom" continues to deliver gas via pipelines to several European countries, last year its flows to Europe fell to their lowest level since the early 1970s, according to International Energy Agency (IEA) estimates.
According to the calculations of the Reuters agency, natural gas supplies of "Gazprom" for Europe have fallen by 55.6% to 28.3 billion cubic meters in 2023.
For this year, Russia expects pipeline gas deliveries to foreign markets to increase by 18% to 108 billion cubic meters compared to 2023, as the gas link "Power of Siberia" with China gradually reaching its nomenclature capacity. But even as more supplies go to China, it can't make up for the loss of the European market, Bloomberg notes.
The company said on Thursday it posted a net loss on sales in 2023 of 364 billion rubles, compared to a profit on sales totaling 1.9 trillion rubles in 2022.
The total revenues of "Gazprom" they fell to 8.5 trillion. rubles last year from 11.7 trillion. rubles a year earlier.
Revenues from the group's oil business grew in 2023 by 6.7% to 3.88 trillion. rubles, while sales in the energy business increased by 8.8% to 617 billion rubles.
After today's weak financial report for 2023, the shares of "Gazprom" initially tumbled as much as 4.4%, marking their biggest daily decline in more than a year amid concerns among market participants about the dividend outlook. It should be noted that the largest shareholder in "Gazprom" is the Russian government, whose budget is under pressure amid rising military spending and Western sanctions.
Toward the end of today's trading, the fall in the shares of "Gazprom" is limited to 3.3%.